Perspectives Blog

China’s reform announcement

Timothy Flanagan, Associate Portfolio Manager | November 21, 2013

China has announced significant social and economic reforms. We believe the vague wording and lack of timetables in the announcement should allow for balancing policy changes against short‐term growth prospects. If fully implemented, the plans announced should move the country towards a long-term sustainable growth model. If rolled out gradually, the near‐term effects on growth should be minimal. The biggest take‐away from China’s recent Third…

Finding opportunity in Chinese reforms

Robert McConnaughey, Director of Global Research | June 16, 2014

We continue to be excited about the opportunities to position in emerging markets ahead of positive change where market uncertainty still exists. Chinese corporate level governance reforms may be fertile ground for undiscovered investment opportunities. The scope and pace of China’s reform will have significant influence on the global economy and should be monitored closely. I spent last week in China, meeting with corporate management teams,…

Not all emerging markets are created equal

Robert McConnaughey, Director of Global Research | January 27, 2014

…similar orders of magnitude in equities and fixed income. The convergence of outcomes was largely the result of some common factors heavily influencing the broad EM growth story. Those factors included the positive effects of reforms stemming from credit and currency crises of the late 1990’s, the rise of outsourcing and low-cost manufacturing, record commodity consumption from China’s infrastructure and capacity building binge, and easy access t…

India’s new government fires investor enthusiasm

Natasha Ebtehadj, Fund Manager, Threadneedle International Limited | September 8, 2014

The landslide victory of the pro-business Bharatiya Janata Party (BJP) has transformed investor sentiment towards India. As the new government puts its stamp on policy, it will create investment opportunities not only in the domestic economy but also in sectors exposed to government-led reform. We believe the new government could enact much needed reforms to stimulate investment and unlock India’s economic potential. India’s economy has been w…

What to make of the rebound in emerging market equities

Dara White, Senior Portfolio Manager | April 14, 2014

Despite continuing headlines of concern, EM markets have rebounded recently. In order to sustain that rally, we need to see progress on export volumes and political/economic reforms. While not universally cheap, EM equity valuations are not unreasonable and we continue to find bottom-up opportunities. A month ago, much of the news from the emerging markets (EM) was negative. We saw headlines highlighting the liquidity headwinds created by U.S….

How bad is China’s credit crisis?

Weili Jasmine Huang, Senior Portfolio Manager | February 3, 2014

…terprises (SOEs) and big investments backed by local governments are too systemically important or too politically connected to fail. This perception needs to be broken in order to continue the financial market liberalization reform. However, it seems like the central government took that safest near-term route by avoiding any contagion risk and significantly reducing potential losses, particularly for public investors. In the absence of a compre…

Does Japan’s sell-off present buying opportunities?

Daisuke Nomoto, Senior Portfolio Manager | February 10, 2014

…also longer-cycle private capital investment and infrastructure spending (to replace aged infrastructure plus special demand from the 2020 Tokyo Olympics) looks favorable. Lastly, we think that Abe’s third arrow of structural reform will come back into focus sometime later this year. Many investors were disappointed with the third arrow announcement last spring simply because it was vague and lacked specifics. Now that both the first and second a…